International Card Services refunds too high fees for ICS Go Card following conversations with ACM
Summary
- ICS had incorrectly classified its ICS Go Card as a credit card, as a result of which, too high fees were charged.
- Following conversations with ACM, ICS has taken measures to reverse the too high fees.
- ACM will see to it that ICS refunds the excess fees and that it prevents a repeat occurrence.
Dutch credit-card issuer International Card Services (ICS) has taken measures to refund too high interchange fees. It has decided to do so following conversations with the Netherlands Authority for Consumers and Markets (ACM). ICS had incorrectly classified its ICS Go Card as a credit card, as a result of which, too high fees were charged. ACM will see to it that ICS refunds the excess fees and that it prevents a repeat occurrence
Too high fees as a result of incorrect classification
If a consumer pays with a payment card, the retailer’s bank pays a fee to the consumer’s bank. This is called an interchange fee. Payment cards, such as debit cards and credit cards, are subject to European rules that set out the maximum amounts of these interchange fees per card type. This prevents unnecessarily high costs for retailers and consumers.
ICS itself has informed ACM that it had wrongfully classified the Go Card as a credit card, even though it did not meet the statutory definition. As a result, ICS received too high interchange fees for payments with this card from banks.
Measures taken by ICS
Following conversations with ACM, ICS has committed to taking various measures:
- ICS will refund the excess interchange fees to banks (as the contractual counterparty) on the condition that, on balance, ICS does not enjoy any financial benefit.
- ICS will withdraw the Go Card from the market, and will inform cardholders about this withdrawal.
- ICS will take compliance measures in order to make sure that this will not happen again.
ACM’s oversight of payments market
ACM conducts oversight over the payments market in order to safeguard fair competition. The European Interchange Fee Regulation (IFR) sets limits on interchange fees, so that retailers and consumers do not pay unnecessarily high costs. More information about this oversight can be found on Transactions with payment cards and interchange fees (in Dutch).
Filing a report with ACM
Do you wish to file a report about unfair competition in the payments market? If so, please file these with ACM: File a report with ACM.